USDA Interim Rule Response + Tribal Concern

By: Rachel Troy 1/25/2020

Addressed to:

Docket Clerk, Marketing Order and Agreement Division

Specialty Crops Program, AMS, USDA

1400 Independence Avenue SW, STOP 0237

Washington, DC 20250-0237

RE: Comments in Response to Interim Final Rule, Establishment of a Domestic Hemp Production Program, 7 CFR Part 990, USDA-AMS [Docket No. AMS-SC-19-0042; SC-19-990-2 IR], 84 FR 58522-58564

To whom it may concern:

This document will briefly address the key points and concerns for the USDA’s recent Interim Rule announcement, on October 31st, 2019, regarding hemp production in the United States. The summary will highlight that this organization has illegally decided that they have power to override congressional direction and inherently intimidate (and potentially incriminate) our country’s rapidly growing amount of hemp focused farmers - in conjunction with the DEA. These rules are not in parallel to what the hemp industry was initiated for and shall be deemed methods of regulatory capture, if left unaltered.

It is important to note that the Interim Rule was put into effect immediately without the appropriate Tribal Consultation. It’s proposed verbiage also directly conflicts with the Federal Government’s clear intent to allow Tribal Governments to exercise exclusive civil regulatory authority over any value that is generated on their lands. Moving forward, the USDA shall remember to appropriately include Tribes, and Tribal Law Enforcement, in future rule making processes by adhering to established government to government consultation policies and especially in regards to political respects and recognition granted towards sovereign nations.

Tribes will be eagerly anticipating direct answers from the USDA regarding the growing amount of discrepancies that they have created between the Federal government and their responsibility to both the citizens and Tribal Governments of their country with these proposed rules.

Specified Concerns:

• There will be much greater testing costs and multiple bottle necks within this imposed system with zero remediation options or alternative means of destruction available for hot crops. Production will be markedly more expensive while the buyers market will continue to fluctuate. At the very least, we should retain rights to the seeds and stalks of the hemp plants, which these government entities do not legally hold jurisdiction over anyways, as they are additional commodities that do not contain THC,.
• All testing laboratories now require DEA (Drug Enforcement Agency) registration to conduct the chemical analysis of controlled substances, which can take up to 9 months to register and complete. This means that there are now currently only 35 official, registered labs in our entire country while 46 total states have enacted legislation to produce hemp. Still interested laboratories may not use their current, operational buildings either and would only be allowed to test for other law enforcement, DEA, or those departments specifically registered with the USDA. While the imbalance of these figures speaks for itself, it should be noted that these exact same laboratories are still heavily backlogged on testing sexual assault evidence and even dispensary raid samples taken from those areas years ago.
• These rules originally stated that there is a short, 90 day application period for farmers and harvest was to have been completed within 15 days (or less) from the sampling taken by a USDA certified agent or other authorized law enforcement officer. Due to the fact that some cannabinoid testing results can take 5+ days to obtain from laboratories alone, this combination almost guaranteed a difficult, if not an impossible window to implement a compliant harvest in this time frame. In the quietly released “Hemp Sampling Training” PDF, the USDA seems to have addressed this concern and is now claiming that harvest can begin before any testing results are obtained. This appears highly suspicious in nature however and therefore, its is extremely important that producers maintain their harvested lots separately and look into these exact regulations in more detail. Especially in regards to legal protections regarding the harvest of a non-compliant crop.
• Another point is that the USDA has allowed states to add additionally restricting sanctions to these rules, yet not less restrictive. This would allow entire states, or tribes, to have the power to completely block, or allow, hemp production entirely and while states and Tribes maintain the right to exercise this authority at will, they are now prevented from the optional acceptance of Delta 9 vs total THC testing protocols and are forced in adhering to the latter and most restrictive option. Not only does this eradicate a large majority of compliant genetics, but this movement actually goes directly against the original congressional direction of the Federal Farm Bills and will disrupt many active research projects that are in conjunction with university programs.
• The Rule states that plans will be applied directly with the USDA and states/tribes must create rules in conjunction with the minimum requirements that were set forth in the 2014 Farm Bill. (There is likely an underlying reason behind their decision to follow this earlier version of the bill though and research will need to be committed on why exactly this is.) There are also worrisome definitions of both “negligent” and “culpable” violations, pertaining to hot crops, that are now defined by the amount of TOTAL THC in the plant sample. The penalty is recorded as anything ranging from .3- 0.5% contributing to a negligent offense and above that, being a culpable one.
• If that's not concerning enough, negligent violations include, but are not limited to: (1) failure to provide legal descriptions of the land on which the hemp is being cultivated (2) producing the hemp without a license; or (3) growing hot crops or any cannabis plants exceeding the newly acceptable total THC level. If you look into these definitions further however, they also appear to possibly overlap and provide intense legal tensions directed towards the farmers, producers, local and law enforcement where the lots are growing.
• This should be watched carefully, as we know there are many factors that can accidentally & easily raise THC levels in all cultivars, plus, they will be utilizing a DEA approved “handler” of marijuana and some sort of approved reverse distributor for its disposal. Their budget for this is quite extraordinary and appears to act as yet another way for them to financially benefit from this emerging industry. Remember, the DEA wasn't even included in either sector of green rush (until just recently) and through these rules, would factually receive more funding through the elimination of hot crops than simply the sampling and testing of compliant ones. This provides them an unfair, if not subconscious financial motive, while the enhanced funding stemming from these activities would also directly and negatively impact the American farmer.
• To promote further fear mongering, any testing sample above 0.3% will be destroyed in accordance with DEA regulations, by distributors, or duly authorized Federal, state, and local law enforcement and this culpable violation will then be defined as being “intentionally, knowingly, willingly, or recklessly” committed. The offender will then be immediately reported to the US Attorney General and Chief Law Enforcement officer, which intentionally raises further hesitations regarding initiating hemp production.
• There are also mentions of variable “measure of uncertainty” (MOU) formulae that will define the margin of error used both sampling and in testing calculations at the DEA approved laboratories. Since there are again, no remediation opportunities available, this MOU is extremely important and must be documented and explained properly in all testing facilities – as it can make the very difference in compliant and “illegal” crops all together.
• The samples that will be taken by these “USDA certified sampling agents” (or other law enforcement officers) will retain the authority to have “complete and unrestricted access to all outdoor operations, buildings, and equipment during normal business hours” which is forecast for concern regarding rural areas, tribal land, reservations, or other areas where farming security is highly prevalent. Plus, once they've been granted legal access to the property, what else are they able to “investigate” while they are inside?
• It was highly apparent that Tribal law enforcement was intentionally left out of the USDA’s verbiage, and legally speaking, they should have been listed every single time State and Federal enforcement was mentioned in this Rule. Tribes inherently retain the ability to provide exclusive civil regulatory authority over hemp production on their own land and reservations and this is highly important in regards to tax authority, which is a key economic resource for any portion of organized society. Federal law clearly categorizes hemp as an enterprise that would produce “value generated on a reservation” and this was established long ago by key Supreme Court tax precedents.
• It is in agreement with the NCAI (National Congress of American Indians) and the Native Farm Bill Coalition that we will require an affirmative regulatory statement from the USDA that directly addresses the concerns in the Interim Rule in regards to disruption of tribal regulated hemp production and the potential tax litigation that can spawn from this. I've attached a prepared form for Tribal Governments to submit comment directly to the docket clerk with their official combined input.
• Regarding physical crop sampling, they will now take the top 1/3 of the hemp plant, which contains the highest concentration of cannabinoids, as opposed to a homogenized, whole plant sample. At the DEA laboratories, they plan to manipulate your sample even further through milling, manicuring, and the removal of stems - in an an obvious attempt to obtain an easier noncompliance offense. Hot hemp will still be considered a TOTAL THC content above 0.3% though and the difference between this and the 0.5% amount - seems to somehow define the exact degree of violation. To counter their threat however, we shall consider their testing intentions felony evidence tampering which again – goes against intents set forth by Congress.
• After accounting for the MOU, what is considered hot hemp will immediately fall under the Controlled Substances Act (CSA) as a Schedule 1 narcotic for the DEA to then waste large amounts of funding and manpower on destroying. Any corrective action plans will require specific actions completed before set dates, strict reporting requirements and more additional penalties for non-compliance discoveries made throughout the process. This strays from the positive promotion of hemp as a new agricultural commodity for our farmers and without remediation opportunities - platforms it as an unappetizing “all or nothing” crop for our country.
• Official USDA sampling and testing protocol documents have also recently been discovered that were not released with the interim rule for us to address in a timely manner. Some of these actually state that the physical crop sample will now either be shipped in a paper bag, via USPS, to one of the only 35 DEA registered laboratories in our country – or the authorized agent can choose to hand deliver it. There is no mention of any special precautions being taken (such as enhanced insurance, recorded transport, nitrogen sealing, or climate stabilization of this sample during shipping) and improper storage or handling can easily manipulate the final testing results in advance of arrival.
• There are also no Federal seed certification guidelines listed in conjunction with these rules. This is due to the fact that under their definitions of complaint cultivation, it would be extremely difficult to grow a legal hemp crop with the majority of the already certified genetics on the market and it is now up to states and Tribe’s to figure out and formulate their own seed testing standards and compliant inventory. The estimated amount of formerly approved hemp genetics in our country that are now illegal - is around 80-90%.
• Also noticeably absent from the rules, are any clarifications on processing, extracting, seed certification, COA’s, and any focused transportation guidelines regarding 3rd party business. This will continue to cause a major issue for all compliant operations, especially in consideration to local law enforcement, and appears to promote dangerous legal confusions in advance for the United States hemp industry.
• My the final comment is in regards to the men and women that have been given the regulatory authority to oversee and assist in all operations regarding hemp production for our country. Portions of this rule require hemp producers to report the GPS coordinates of every lot and greenhouse to be sent directly to the USDA’s Farm Services Agency (FSA) where they will provide their own form of licenses, etc. This sounds plausible, except there are still people in this exact department - with a documented hatred for hemp production entirely.
• As recently as the summer of 2019, a state executive director for the FSA personally threatened my Oklahoma farmers with claims he would remove all of their government subsidies if they were to plant one hemp seed in the ground. His name is Scott Biggs, he still sits in the same office and was finally slapped with a lawsuit and gag order for similar misconduct that year. His actions are just one example of inappropriate fear mongering and abuse of regulatory power though and those with public vendettas and track records of this kind - should be purged from positions of power and prevented from causing further damage in the emerging American hemp industry.

In conclusion, the USDA and all other government entities shall be reminded, at all times, to serve and respect the farmers, Tribes and citizens of the our country over any immoral, corporate or foreign interest. We will anticipate the Final Rule in regards to this statement while at the same time – being realistic and in preparation for more constrictions. Only together, can we successfully navigate these troubling legalization waters though and it is imperative as farmers, tribes, business owners and consumers – to officially unite against this growing governmental concern.

Public commentary will be accepted by the USDA until January 29th, 2020.

RT

Official USDA Testing & Sampling Guidelines:

https://www.ams.usda.gov/sites/default/files/media/TestingGuidelinesforHemp.pdf?fbclid=IwAR0BgOU3SE37BQmQNzv9f4VuuE_776dlRbUB4DtU2k8QdqwXE0OMRvkdWEs

https://www.ams.usda.gov/sites/default/files/media/SamplingGuidelinesforHemp.pdf?fbclid=IwAR2Y1bX-ze346JYpYHbWfYcJEj6PQzfsssX-JeCoroNEDlmEIag8og3vda0

https://www.ams.usda.gov/sites/default/files/media/USDAHempSamplingTraining112719.pdf

DEA Registered Laboratories:

https://www.ams.usda.gov/rules-regulations/hemp/dea-laboratories?fbclid=IwAR31IbPq-u23mZSaMRwicVPzr_RIO8Uk-TMHSW-JRtSn_UvE4g1aOVq8fso

Draft Letter for Tribes:

NCAI and the Native Farm Bill Coalition have also worked together on developing a draft comment letter from input received from Indian Country. This is framework to adapt/modify to your tribal nation's specific needs and individual policy positions on hemp production. 

[Letterhead]

[Date]

Docket Clerk, Marketing Order and Agreement Division

Specialty Crops Program, AMS, USDA

1400 Independence Avenue SW, STOP 0237

Washington, DC 20250-0237

RE: Comments in Response to Interim Final Rule, Establishment of a Domestic Hemp Production Program, 7 CFR Part 990, USDA-AMS [Docket No. AMS-SC-19-0042; SC-19-990-2 IR], 84 FR 58522-58564

Dear Docket Clerk:

On behalf of [Name of Tribe or Tribal-serving organization], I am writing to submit comment on Doc. No. AMS-SC-19-0042; SC19-990-2 IR regarding the Interim Final Rule Establishment of a Domestic Hemp Production Program.

Based on data from the 2017 Census of Agriculture, 58.7 million acres of land across Tribal communities are already engaged in some type of food and/or agricultural production, with a total estimated value of $3.5 billion. The legalization of industrial hemp production presents a ripe opportunity for Tribal nations and producers to expand their economic footprint in terms of both production and value-added agriculture. The Interim Final Rule clarifies a number of administrative uncertainties facing the market to mitigate many of the previous production risks in this new industry. Still, many remaining questions surrounding industrial hemp production in Indian Country may pose unintended obstacles to Tribal producers seeking to establish a foothold in this industry. Outlined below are a few of our concerns with the current Interim Final Rule and recommended steps the Department can take to address these issues during the remaining stages of the rulemaking process. [Under each area below, insert additional Tribal experiences, stories, and research as applicable]

1. Jurisdiction
2. Civil Regulatory Authority
3. The legalization of industrial hemp production creates a mechanism for commerce throughout Indian Country, aligning directly with the express Federal interest in supporting Tribal economic development and self-sufficiency.1 To preserve these interests and eliminate unnecessary obstacles for Tribal producers, it is imperative that the Final Rule incorporate a legal analysis stating that The Agricultural Improvement Act of 2018, Pub. L. No. 115-334, expressly preempts state and local civil regulatory jurisdiction over transactions involving non-Indians on Tribal land.2 Congress’ intent is clear that Tribal nations may exercise exclusive civil regulatory authority over hemp produced in Indian country, exclusive to and on par with States on State land.3 However, the regulatory burdens in the statute are proscriptive4 and it is critical that Tribal nations be able to regulate that activity exclusively, particularly with respect to tax authority – a key economic resource to support the affirmative duties of asserting civil regulatory control over hemp production. Further, hemp production in “Indian country,” as that term is defined in federal law, is the exact epitome of the type of “value generated on the reservation” contemplated by key Supreme Court tax precedent5, making an affirmative regulatory statement by USDA that squarely addresses this issue necessary. A failure to do so would cut against the Federal government’s trust responsibility to Tribal nations, and may open the door to tax litigation that could upend Tribal capacity to conduct hemp production in Indian country. Throughout the regulatory drafting process, USDA-AMS has been inclusive of Tribal perspectives in implementing this new industry for our communities and continues to do so in seeking our comments in response to the Interim Final Rule. We are encouraged by these discussions and strongly urge the agency to include this legal clarity in the Final Rule so that our sovereignty as Tribal nations continues to guide the development of this industry on our lands without unnecessary obstacles posed by unwarranted attempts by States to regulate such activity. [Insert Tribal Nation] stands ready to assist with this endeavor, or to provide further recommendations on regulatory language if needed.
4. Parity
5. Federal, State, and local law enforcement
6. We appreciate USDA-AMS taking a holistic view of all of the stakeholders involved in successfully enforcing the requirements of the Interim Final Rule. While Federal, State, and local law enforcement play vital roles in public safety and reporting requirements under the IFR, the regulation does not consistently include Tribal law enforcement as a recognized entity. Because of the vital role Tribal law enforcement plays in protecting and serving communities throughout Indian Country, and the role Tribal law enforcement must play in the Tribal regulation of hemp, USDA-AMS must include the term “Tribal” to accompany all instances of “Federal, State, and local law enforcement” in the final rule to uphold Congress’ acknowledgement of true Tribal sovereignty and parity in the regulation of industrial hemp.
7. Sampling and Testing
8. Harvest Window
9. The Interim Final Rule states that the 15-day post-sample harvest window was developed to account for climatological and logistical factors that may inadvertently cause a rise in THC content. While USDA-AMS must consider these factors, further guidance is needed for producers in instances where an unforeseen weather or logistical issue renders harvest impossible or impracticable within 15 days following a sample being collected. To accommodate for this possible occurrence, we strongly urge USDA-AMS to allow for extended harvest windows in submitted Tribal and State plans so that this administrative uncertainty does not inadvertently cause a producer to lose their investment in this capital-heavy industry.
10. Measurement of Uncertainty
11. USDA-AMS is to be commended for recognizing that “there must be a high degree of certainty that the THC concentration level is accurately measured and is in fact above 0.3% on a dry weight basis before requiring disposal of the crop.” This belief, buttressed by the requirement that laboratories calculate a “Measurement of Uncertainty,” provides a necessary level of surety for those financially invested in hemp production. However, more details are needed regarding how this baseline measurement is calculated by each testing laboratory because this figure could vary depending on the testing technology used by each laboratory. Providing further clarity to this methodology will provide prospective hemp producers with the additional tools needed to effectively mitigate agricultural risk in this new sector.
12. Laboratory Certifications
13. The Interim Final Rule contemplates requiring laboratories testing the THC content of hemp to obtain either a certification through the USDA Laboratory Approval (LAP) or an ISO 17025 accreditation for quality assurance measures. While we are encouraged by the USDA-AMS focus on the integrity of THC testing procedures, we are concerned that incorporating these additional requirements in the Final Rule would pose unnecessary barriers to industry development. This is especially true in the rural and remote parts of Indian country, which may not be located near laboratories that would meet these existing criteria.
14. Placing either of these additional requirements on laboratories could pose an unnecessary obstacle for developing a local hemp market in areas already stifled by lack of economic investment and opportunity. Therefore, we urge USDA-AMS to allow Tribal and State plans to regulate the certification of their own labs in a way that maintains integrity to the testing process while also remaining cognizant of the economic profile for the regulated jurisdiction. Similarly, we also urge USDA-AMS to explore the least costly option among the ISO 17025, LAP certifications, and other accreditations so that the most affordable options for producers can be chosen if this requirement is included in the Final Rule.
15. Felony exclusion – “Key Participant”
16. Both the Agricultural Improvement Act of 2018 and the Interim Final Rule place a 10-year ban on individuals with Federal and State controlled substance felony convictions from participating in industrial hemp production. To comply with this requirement, applicants under each State, Tribal, and USDA regulatory plan must submit a criminal history report to accompany their license or permit application. For business entity applicants, this requirement extends to each “key participant” in the prospective hemp growing enterprise with a “direct or indirect financial interest” in the business.
17. While the IFR provides clear examples of individuals covered by this definition in a conventional setting, it does not contemplate the wide array of entities existing across Indian Country. For example, if a Tribal nation sought to operate a hemp production operation under its governmental structure rather than a stand-alone business entity, it is unclear who would be a “key participant” under the IFR, as this does not fit within a typical business model (i.e., sole proprietorship, corporation, partnership, etc.).
18. Because of the diverse complexities intertwined with conducting business throughout Indian Country, we strongly urge USDA-AMS to revise the definition of “key participants” so that these individuals can be determined exclusively by the Tribal nations when Tribal nations submits hemp plans under a Tribal government enterprise or business entity. For Tribal nations falling under the regulation of the USDA hemp plan, an exclusion to the definition of “key participants” should be included so that individuals without direct decision-making authority over the enterprise — such as landowners or Tribal leaders — do not fall within the requirements of the IFR.
19. Plan Approval and USDA Oversight
20. The Interim Final rule provides flexibility for producers regulated under a Tribal or State hemp plan so that if said plan is revoked by USDA, the individual producer may continue to operate under the revoked plan for the remainder of the calendar year in which the revocation became effective. The producer is then eligible to apply for a license issued under the USDA plan 90 days after notification of revocation of the State/Tribal plan is issued. This flexibility provides the necessary consideration for individual producers so as to not interrupt their livelihood, but the timing of the revocation contemplated by the Interim Final Rule could be problematic for a producer if notice of State/Tribal plan revocation were issued late in the calendar year. For instance, if the notice of revocation were issued on December 1, the producer would still be held to the requirements of the revoked State/Tribal plan until December 31 and could apply for a license under the USDA plan on or after March 1 of the following calendar year. However, it is unclear how that individual producer could be legally producing hemp under any plan if USDA-AMS faced an unforeseen delay in issuing the producer a license until sometime in January of the following calendar year. To remedy the possibility of this regulatory gap occurring for any individual producer, we strongly urge USDA-AMS to consider developing a temporary permit system, for past producers with pending applications for licenses under the USDA hemp plan. This would allow producers to continue operating, in a manner in compliance with applicable regulations, until his or her federal licensed is either issued or denied.
21. Criminal History Report
22. As part of the Interim Final Rule, Tribal nations must obtain a criminal history report for each applicant for a license/permit under an approved Tribal hemp plan. Although this provides the necessary flexibility in obtaining the criminal history report of prospective licensees, there is a lack of clarity surrounding this issue between federal agencies and Tribal nations seeking to regulate on-reservation hemp production. Therefore, to resolve this issue, we request further agency guidance clarifying that there is no required method or platform for Tribal nations to use in generating criminal history reports for prospective hemp licensees.
23. Interim Final Rule Comment Deadline and Future Tribal Consultations
24. We appreciate USDA-AMS for honoring requests voiced at the Tribal consultation occurring on December 11, 2019, by extending the Interim Final Rule comment deadline until January 29, 2020. Pursuant to Departmental Regulation 1350-002, Tribal leadership maintains the ability to request further consultation, as necessary, throughout remainder of rulemaking process, including after promulgation of a Final Rule. We look forward to furthering discussions with USDA-AMS in developing a Final Rule that supports economic development throughout Indian Country for Tribes and Tribal producers alike.
25. [Insert additional comments specific to Tribe, if applicable]

We truly appreciate the ongoing work of AMS with Tribal nations and producers throughout the drafting of this Interim Final Rule, and hope to continue building upon this relationship and continue the government-to-government dialogue so that Tribal nations and their citizens can full realize the potential of this economic development opportunity.

Sincerely,

[Signature]

1 See, e.g., Michigan v. Bay Mills Indian Community, 134 S. Ct. 2024, 2043 (2014) (Sotomayor, J., concurring) (determining that “[a] key goal of the Federal government is to render Tribes more self-sufficient, and better positioned to fund their own sovereign functions, rather than relying on Federal funding”).

2 See 7 U.S.C. § 1639r(b) ([T]he Secretary [of Agriculture] shall have sole authority to promulgate regulations and guidelines that relate to the production of hemp.); see also, The Agricultural Improvement Act of 2018, Pub. Law. No. 115-334, Note #8, Title X - Joint Explanatory Statement of the Committee of Conference (“The Managers clarify that the Secretary has the sole authority to issue guidelines and regulations regarding the production of hemp.”); id. (“[S]tates and Indian tribes may limit the sale of hemp and hemp products within their borders[.]) (emphasis added); A similar analysis was developed by the Secretary of the Interior in the final regulations regarding Residential, Business, and Wind and Solar Resource Leases on Indian Land. See 77 FR 72447-448 (December 5, 2012).

3 See, e.g., 7 U.S.C. § 1639q (Authorizing states and Indian tribes to regulate the production of hemp, to the same degree, on their respective lands.).

4 Id. at § 1639q(b).

5 Washington v. Confederated Tribes of Colville Reservation, 447 U.S. 134, 156-57 (1980) (Stating a Tribe’s interest in raising revenues for essential government programs “is strongest when the revenues are derived from value generated on the reservation by activities involving the Tribes and when the taxpayer is the recipient of tribal services.”).